Valuation of common stocks is a fascinating topic. What makes the topic interesting is that net oveyore pronto Using the Gordon Model (constant growth version of the formula for the price of a shared there of mento, este (1) Compute the required return, K, for the company (2) Compute the expected cash dividend to be paid by the company in your (3) Compute the expected price for the company in 5 years. (4) Compute the justified price for the company today. Data for Computation 111 Current EPS = $5.00 Current retention rate = 40% Projected average annual growth rate in DPS for the next 5 years = 10% Average annual dividend yield for the company's common stock = 2% Average annual return for the S&P 500 index = 12.4% Average annual return for the 30 year Treasury Bond = 5,8% Beta for the common stock = 1.2 toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). Paragraph 14px Arial